Oppenheimer Fumbles Tax Reports, Clients Fume

Oppenheimer & Co. is behind the 8-ball again, and this time it’s clients who are furious.

It seems that Opco is late in mailing 1099 brokerage forms to clients so they can complete their tax returns. Under Internal Revenue Service rules, companies were required to send the forms out by Feb. 16, but several Opco brokers across the country said it hasn’t happened.

Here’s how one advisor put it in a message we received Feb. 24 in our “Submit a Rumor” mailbox:

“Opco doesn’t have them ready. The Lowenthals [“Bud” Lowenthal, Oppenheimer’s chairman and CEO, and his son, senior managing director Rob] try to do things on the cheap side again…Clients can’t file their taxes….”

A second advisor, who left in late 2015 after a three-year Opco stint, said his clients are furious.

“They are ready to file their income taxes and the one and only firm they are waiting on is Opco,” he wrote in an email, noting that the same problem occurred last year. The firm has given them no explanation of this year’s delay, he added.

“Allegedly it’s a vendor problem which was the same excuse they used last year,” a former Oppenheimer managing director told us.

An Oppenheimer spokeswoman did not respond to requestsfor comment about the issue or when it would be resolved.

A person answering a phone at an Opco office in Arizona said the forms will likely be sent out on Thursday or Friday. “If you don’t get them by the middle of next week we can e-mail them to you,” he said. An adviser in the Midwest told us that the forms will be mailed over the weekend.

In a January 29, 2016, press release on its 2015 earnings, Opco said that technology improvements are a key firm focus.

“The Company believes that its ongoing investment in new technology solutions will deliver a more competitive and effective platform to meet current and future requirements of clients as well as the compliance and regulatory information necessary to meet our responsibilities to clients in an era of enhanced regulatory expectations,” it wrote. “The Company and its management recognize the importance of effective supervision, appropriate systems and controls, and an ethical culture to ensure success in today’s competitive environment.”

Oppenheimer’s communications and technology expenses, however, decreased last year to $66.9 million from $67.2 million in 2014.

“This is only going to cause clients to take their business down the road to a more reputable broker dealer,” wrote the source who tipped off to the problem. “Way to destroy FAs’ books, Bud.”

The snafu could invite deeper regulatory scrutiny for Oppenheimer, which has been in recent years for a wide range of missteps, including failure to withhold taxes owed by U.S. citizens on gains in their penny-stock-laden accounts.

Robert Okin, who had run the company’s private client division, resigned at the end of 2014 and seven months later agreed to pay $125,000 and accept a one-year ban from acting as a supervisor in a case involving improper sales of penny stocks.